Analyzing the cryptographic project attempting Hybrid Rollup in one article.
Original author: 0x Facai, Jaleel, BlockBeats
Original editor: Jack, BlockBeats
On June 16th, Frax Finance, a hybrid algorithm stablecoin protocol, announced the launch of an Ethereum Layer 2 network called Fraxchain, where all Frax assets will receive native support. It is reported that Fraxchain will adopt a hybrid rollup scaling solution that combines OP Rollups and ZK Rollup, aiming to achieve better scalability, faster finality, and enhanced security against competitors, attracting significant attention from the crypto community.
In fact, this fusion Rollup approach is not something new. As early as July 2022, Kelvin Fichter, the core developer of Optimism, developed the Optimism Bedrock architecture and proposed this hybrid approach in a tweet, stating, "Optimistic Rollup currently has advantages over ZK similar products, and Bedrock aims to make a seamless transition between Optimistic and ZK possible," and had discussions on this topic with Vitalik Buterin, the co-founder of Ethereum.
Building on Kelvin Fichter's approach, Vitalik Buterin, the co-founder of Ethereum, also expressed his views: combining Optimistic Rollups with ZK Rollups, and using governance solely to address bugs between the two. The process is as follows: 1) Publish blocks, 2) Wait for a 24-hour fraud challenge period. 3 (a) If no challenge occurs, publish ZK SNARK for final confirmation. 3 (b) If a challenge arises, make a decision based on two out of the three options: challenge game, ZK SNARK, and governance.
With the increasing competition for layer 2 scalability, this rollup fusion expansion approach is increasingly being applied. In addition to Optimism, there are multiple teams in the market researching and experimenting with Hybrid Rollups. What is a Hybrid Rollup? Why choose Hybrid Rollups? Which teams are developing in this field? BlockBeats analyzes and organizes this in the following article.
What is a Hybrid Rollup?
Hybrid Rollup is a hybrid approach to Rollups that combines Optimistic Rollups and ZK Rollups to optimize product functionality to achieve the best Product-Market Fit (PMF), which means achieving the best match between the product and the market.
To understand what a Hybrid Rollup is, it's necessary to first understand what Optimistic Rollup and ZK Rollup are.
First, Rollup is one of the Ethereum scaling solutions that transfers the computation and storage of transactions on the Ethereum mainnet (Layer 1) to Layer 2 for processing and compression, and then uploads the compressed data to the Ethereum mainnet to expand Ethereum's performance.
Essentially, users do not send transactions to miners on L1, but rather send them to Rollup servers, where they are executed outside of the Ethereum main chain. However, these Rollups will publish the transaction data to the main chain. When transactions are published to the main chain, they inherit the security properties of L1. Rollups often have programmability, so they need to support smart contract (SC) languages for developers to develop DApps. However, due to the incompatibility of Privacy and EVM (Ethereum Virtual Machine), Solidity cannot be directly used to develop privacy-oriented DApps. This requires a custom smart contract language to support the development of both public and private contracts. Of course, this requires VM module adaptation to maintain different types of state trees.
Rollups usually operate on the second layer while also having the flexibility to operate on the third layer.
Based on different solutions to ensure the validity (i.e., data correctness) of compressed data, Rollups can be further divided into ZK Rollups and Optimistic Rollups.
ZK Rollup is a Rollup solution that uses zero-knowledge proofs. ZK stands for zero knowledge. The difference from other Rollups is that ZK Rollup uses zkSNARK algorithm (a zero-knowledge proof algorithm) to compress data and ensure security.
Optimistic Rollup literally means optimistic Rollup, which optimistically assumes that the data synchronized to Layer 1 is correct. If someone believes that the synchronized data is incorrect (i.e., fraudulent behavior exists), they can issue a challenge during the challenge period. Therefore, this proof method is also called fraud proof, which guarantees that the data synchronized to Layer 1 is valid.
Hybrid is a solution that combines two types of Rollup. It supports more contract types, including public, private, and mixed contract types. For developers, they can freely choose contract types based on their own needs. For users, it also provides a high degree of freedom to freely choose transaction types in mixed contracts.
The following graph depicts the positioning and functions of Hybrid Rollup. Currently, there are multiple projects dedicated to building in this direction. Although the technical details of each project may vary, they all share a common vision: to bring more possibilities, higher security performance, more real-world scenarios, and more everyday users to the blockchain industry.
Related reading: "OP+ZK, will Hybrid Rollup be the ultimate future of Ethereum scalability?"
Which teams are trying Hybrid Rollup?
OP+ZK's Rollup technology may seem distant to us, but in fact, many well-known cryptographic protocols and projects have already attempted in this field. In addition to Frax Finance, the L2 network of Fraxchain, which was recently announced, many top teams have also made their own products. BlockBeats has briefly summarized these protocols and projects.
Frax Finance
BlockBeats previously reported that on June 16, the hybrid algorithm stablecoin protocol Frax Finance announced the launch of an Ethereum Layer 2 network called Fraxchain. This network aims to create a smart contract platform with a focus on decentralized finance, and all Frax assets will be natively supported on Fraxchain. Co-founder of Frax Finance, Sam Kazemian, revealed that Fraxchain is likely to be launched by the end of this year.
In addition, during a recent appearance on the podcast "Flywheel DeFi," Frax Finance founder Sam Kazemian revealed that, unlike most second-layer scaling solutions on the market, Fraxchain will adopt a hybrid rollup scaling solution that combines OP Rollups and ZK Rollup. This means that Fraxchain will be built on the Optimistic rollup architecture and integrated with zero-knowledge proofs, aiming to achieve better scalability, faster finality, and enhanced security against competitors.
It is worth noting that the network will use the Frax stablecoin and Frax Ether (Frax liquid staking derivatives) to pay transaction fees. Some of the fees generated in this Layer 2 network will be burned or redirected back to the Ethereum mainnet to be allocated to holders of FXS governance tokens.
Metis
BlockBeats previously reported that on March 3 of this year, MetisDAO, which focuses on L2 development, stated in a blog post that the Ethereum Layer 2 network Metis is developing a hybrid rollup based on the combination of Optimistic Rollup (OPR) and zero-knowledge proofs (ZKP), combining the scalability of Optimistic Rollups with the security of ZK Rollup. At the same time, Metis stated that developing this new architecture is one of its top priorities and will open-source the technology.
In the 2023 roadmap released by Metis Andromeda, Hybrid Rollup occupies a significant portion, demonstrating the level of importance Metis places on it.
Metis Network's Hybrid Rollup Workflow Aztec
BlockBeats previously reported that on May 4th, Aztec announced the launch of a public and privacy hybrid zkRollup network, which will continue to be named Aztec. The network enables the execution of both public and private smart contracts within a single environment, providing developers with more design choices on this chain.
Aztec allows the execution of smart contract logic in both public and private ways while still inheriting the security advantages of Ethereum. On Aztec, privacy is optional rather than a default requirement. The goal is to scale Ethereum by maintaining data transparency while enabling privacy function calls, transaction privacy, and user anonymity. This allows users to protect sensitive information from being leaked while still being able to share such information with relevant authorities for compliance purposes when necessary. Aztec also stated that the team is currently finalizing basic contract deployment and plans to establish a local testnet by the third quarter of 2023. Users are expected to have access to a mature public testnet by early 2024.
Polygon
Last May, Polygon partnered with global professional services and technology company Ernst & Young (EY) to release Nightfall 3.0. Polygon Nightfall is essentially an Optimistic Rollup that uses zk encryption to protect privacy. Its most notable feature is the effective combination of the core concept of Optimistic Rollup with commonly used zero-knowledge (ZK) cryptography in ZK-Rollups, thus achieving a fusion of scalability and privacy.
In fact, as early as 2019, EY released the initial version of Nightfall. The most different feature from other zk solutions is that Nightfall is a rollup focused on privacy. EY positions it as "one of the most prominent privacy solutions on Ethereum." Specifically, on Nightfall, each transaction includes privacy, meaning that if Alice sends an asset to Bob, others will not be able to see what the asset is, how much value it contains, or where it went.
The reason why more emphasis is placed on the privacy of transactions is that EY targets businesses as clients. Initially, Nightfall attempted to directly build the first enterprise-level blockchain on Ethereum, but eventually found that privacy on the Ethereum mainnet was too expensive. Therefore, they switched to Layer 2 and ultimately chose to cooperate with Polygon.
Mina
The development team of the lightweight blockchain protocol Mina, O (1) Labs, has submitted a proposal to Optimism (now renamed OP Mainnet) to apply its zero-knowledge proof technology built on MIPS zkVM to OP Stack fraud proofs. In addition to the local high-performance snarkyJS, MIPS functionality allows application development using a general-purpose language.
Furthermore, Optimism completed the mainnet upgrade of Bedrock at 2:50 AM on June 7th, Beijing time. The upgrade not only reduces transaction fees, shortens system delays, and improves node performance. It also makes seamless integration between Optimistic and ZK possible.
Why Choose Hybrid Rollups?
By adopting the hybrid architecture of "Optimistic + ZK Rollups", we can maximize the advantages of both. This means that not only can we retain the Optimistic Rollup architecture and EVM compatibility, but also maximize the generality of zero-knowledge proofs to enhance security. Its effectiveness proof can clearly ensure the correctness of off-chain transactions while preventing operators from executing invalid state transitions.
ZK Rollup can improve throughput because zero-knowledge proofs eliminate the need for additional data, retaining only the minimum required for each transaction. This greatly increases throughput and reduces Ethereum congestion.
In addition, ZK Rollup brings additional benefits, such as faster transaction speeds and faster attainment of finality.
By implementing zero-knowledge proofs on the Optimistic Rollup architecture, the time for final transaction confirmation will be reduced from 7 days to about 4 hours. There are usually two types of time, confirmation time and finality time. Optimistic Rollup provides faster confirmation time, however, the premise of the Optimistic Rollup is that all transactions are initially valid, so a 7-day buffer period is required. That is to say, full transaction finality can only be achieved after confirming the transactions for 7 days, and this 7-day window is left for validators to submit fraud proofs (if necessary). By combining zero-knowledge proofs, the validity of transactions can be confirmed faster as long as the prover generates the proof and the verifier approves it.
Funds can be withdrawn from L2 without delay, which also means that the hybrid Rollup will bring higher capital efficiency to users.
